DV Trading breaks away from Rosenthal Collins

Chicago futures firm DV Trading is venturing out on its own, with its two top executives buying the enterprise from veterans at Rosenthal Collins Group who helped them get started.

DV Trading CEO Jared Vegosen and President Dino Verbrugge will take ownership and split from RCG on Sept. 1, according to both firms. The traders are parting amicably from the longtime Chicago futures broker, which backed Vegosen in launching DV's Chicago office in March 2007.

"They gave us a great platform to found and grow our business," Vegosen said. "Moving out on our own is just really the next logical progression."

Verbrugge, 41, whose initials named the firm, founded DV in Toronto in 2006, and Vegosen, 34, played a key role in building out the business in Chicago, which is now its headquarters and home to its largest office with about 150 of its 225 employees.

DV Trading is a larger midsize trading firm in a Chicago cottage industry that numbers probably a few hundred and is dominated by large firms like Jump Trading and DRW Trading.

Some firms shuttered or sold out in recent years as a slump in interest rate moves sapped volume and volatility from trading while technology and compliance costs rose. The firms tend to be high-volume buyers and sellers of contracts, making money off pricing discrepancies in the market.

Vegosen said DV's revenue and profits have risen steadily since its founding and that the firm increased headcount by about 15 percent to 20 percent this year. He declined to provide financial details.

DV focuses on trading futures and futures options, and still has about a dozen traders on futures trading floors; but it mainly makes markets electronically, as do most firms. In addition to futures, it also trades on a more limited basis in other asset classes, including stocks and stock options.

As buying and selling futures contracts moved from the trading floors to the electronic sphere, capital requirements and compliance requirements increased. That led some fledgling firms to RCG, where industry veterans Bob Collins and Les Rosenthal were willing to invest in promising traders.

"The barriers to entry these days are very high so they come and consolidate with us," said Rosenthal, who was chairman of the Chicago Board of Trading in the early 1980s. "They're nice, young, ambitious guys," he said of Vegosen and Verbrugge. DV Trading has been the biggest trading group under the RCG umbrella, Rosenthal said.

Vegosen grew up in Chicago and attended the private Latin School of Chicago before heading to Northwestern University, where he majored in political science and economics. He only traded for three years at Chicago trading firm TransMarket Group, from 2004 to 2007, before getting the itch to start his own venture with Verbrugge, who he met at a 2004 Chicago launch party for the now defunct Trader Monthly magazine.

Today, DV Trading operates from 26,000 square feet downtown at 216 W. Jackson, near the trading floors. It's in the same building as RCG, though in separate space, and plans to remain there even after the buyout. The second-biggest DV office, by staff, is in Toronto, but New York is a close third, Vegosen said.

DV's core business is trading interest rate contracts, including Eurodollars, and in commodities, especially such energy contracts as for crude oil and natural gas. Over the past four years, the firm has steadily increased trading in options on futures, Vegosen said. DV plans to keep reinvesting across those strategies, and others, he said.

Editor’s note: A July 19 story mistakenly reported that Jared Vegosen earned a degree from Northwestern University.

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